Legality of a Default

TheMarkChristie

Hi All

After a little bit of advice

5 Years ago I was made redundant and paid a £7,800 check into RBS, However right after this the cashier paid the next person in the queues £1,000 into my account. I didn't not notice this as I paid my mortgage and a few other bills up front while I had the money so I didn't default on anything.

It was not until there was only a few hundred pound left in the account that the Bank called and told me that they had made a mistake and they where giving me a £1,000 loan (interest free) and that I would be paying £100 a month for 10 months until it was paid.

I obviously was not happy about this and never signed any credit agreement with them, however they started taking the money out of the account each month until I noticed (3 months in)

I have been chasing them for over 3 years to try and get this wiped as I feel it was fraudulent as I never signed any agreement.

My complaint to the bank was
A) I didn't agree to this loan
The terms would never have suited me after being made redundant (even though I had no choice)
C) They registered a default against me for not paying

So they finally got back to me today to say that they agree they have no signed document so have no legal standing to recall the loan through the courts, but they will continue to try and get it back themselves. Also they feel that the default should stand as there is a default against a loan account in my name regardless if I agreed with it or not.

I was looking for some advise to see if the Default has any legal standing if the loan doesn't?

I had previously been in contact with the Financial Ombudsman who said that the bank are in the right as I had spent the money.

Any info or guidance would be great

Yours
Mark

d123

You had the money, and have had an answer from the Financial Ombudsman, what do you expect to hear differently here?

TheMarkChristie wrote: »

I had previously been in contact with the Financial Ombudsman who said that the bank are in the right as I had spent the money.


Yours
Mark

TheMarkChristie

Well I thought that someone would be able to give me advise, or give me an idea in the direction to look as I don't see how it is legally possible to register a default against a person who has not signed a credit agreement as per the Consumer Credit Act

CKhalvashi

The bank could have taken the money then, putting you into an unauthorised overdraft.

If they offered this with no further issue, then they have already been extremely generous IMO.

Thrugelmir

TheMarkChristie wrote: »

I obviously was not happy about this and never signed any credit agreement with them,

You were happy to have a £1,000 credited to your account and spend the money though. You were offered an interest free method of repaying the money. You have declined this offer. Therefore you leave yourself open to whatever course of actin the bank decide to take.

Unfortunately finders keepers is not a legal stance either. As the FO has already ruled.

d123

TheMarkChristie wrote: »

Well I thought that someone would be able to give me advise, or give me an idea in the direction to look

The direction to look in would be the one where you repay the money you have taken...

harryfrombarry_2

TheMarkChristie wrote: »

Any info or guidance would be great

PAY THE BANK THE MONEY YOU OWE THEM.

That's my advice.

OTHERWISE YOU ARE A THIEF.

betterdaysahead

In my opinion, the money is not yours so needs to be repaid. However, as you claim that you were unaware of this money being paid in (it is very easy for people to say 'you should have known' but a lot of people judge their spending on what their balance shows) and if you can show that you do not have sufficient funds to pay this back in the manner that the bank has requested, you would be well within your rights to pay the amount back in instalments that are affordable to you.

TheMarkChristie

Thanks for all the info#

Maybe if I word it differently

Can the bank register a default against me for a loan that I have not signed? There is no credit agreement so no legal standing for a default?

DCFC79

Just have to ask but how did the other cheques makes they're way into your account, the cashier needs your bank card to pay the money in.

MisterBaxter

Whilst I agree that the OP spent money that wasn't rightfully theirs so should have no expectation other than to have to repay it; it does throw up a potential flaw in the reporting system whereby a default can be registered without there being any evidence that a credit agreement existed worse than that there was no evidence of any intent to enter into a credit agreement.

I know there have been issues in the past for CCA agreements not being enforceable but at least in those instances the debtor had a piece of plastic that they had applied for and had clearly being making use of that at least showed intent even if there was no formal signed agreement.

I could see a situation where a relatively small amount placed in an account in error could be spent without even thinking about it. Whether £1000 is a small amount is relative but if you've just had a large amount paid in at around the same time, particularly a stressful time, I can see how it could be missed. I personally think that in this instance it was a bank error and that repayment terms should have been agreed that better suited the customer and not the bank; they should have taken the customers circumstances in to account when deciding on the repayment terms.

If I found myself in the same position I would stop making any further payments to the bank until they had agreed to remove the default and had agree more affordable repayment terms; They've already said they have no recourse through the Courts and the worst that can happen is that the default that is already recorded stays on file for 6 years so either way no worse off.